Bloomberg | | Posted by Zarafshan Shiraz
South Africa stands out among its peers around the world, offering the unexpected advantage of affordability. This was announced by the securities company RMB Morgan Stanley.
The rand has depreciated by about 9% against the dollar and euro last year, and by about 12% against the British pound. The fall in prices in South Africa means that the relative prices of local goods and services sold are lower than in other regions, as inflation is much more subdued compared to overseas.
“Consumers can drink almost three cappuccinos in South Africa for the price of one in the United States, and they can drink almost three cappuccinos in South Africa for the price of one in London,'' said Mary Curtis, a strategist at the company, and Andrea. I can stay there for four nights.'' Macia, economist.
“In the broader picture, the low relative prices of South African goods and services are just one example of the value of South African assets,” they wrote in a note to clients.
Bond and stock valuations look cheap compared to peers, but elections scheduled for later this year could provide another window to unlock some value, they said.
Meanwhile, price differentials are supporting the continued recovery in South Africa's net tourist income, while a weaker currency should slow import growth, they said. Both would help offset the decline in export prices and limit potential deterioration in the current account balance.
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